Saving Money and Setting Up an Emergency Fund

Filed in archive Saving on February 9, 2009

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At the same time that you are trying to save money, you want to make sure that you also are putting some money away for an emergency fund. You need an emergency fund as quickly as possible because of the potential cost of
emergencies and the duration that could be involved. Here are some tips on how to save money in an emergency fund.

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An emergency fund should be able to cover your expenses for several months. You want to remember that there are
deductibles on your medical liability and auto coverage if you get into an accident. Besides that, one thing that many people are experiencing now is sudden layoffs. With so many people out of work right now, you should probably expect to be without a job for a while. Saving money in an emergency fund is a great way to be prepared.

When it comes to the major need for an emergency fund, L. Marie Dubuque of Consumer Education at Suite 101 says that:

"Illness is the number one reason Americans file for bankruptcy. Even if you carry adequate health insurance, deductibles and co-pays can eat up your cash very fast. That's why you need to set aside three to six months' salary in an emergency fund."

You can also find many other reasons and tips on why you need to save money in an emergency fund in her article.